Will My Poor Credit Stop Me From Getting a Job?

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Poor credit might prevent you from getting a loan. But what about a new job? Read on to find out. [[{“value”:”

The average credit score in the U.S. was 715 in 2023, reports Experian, one of the three major credit bureaus. And that score is considered “good.”

A credit score of 740 to 799 is considered “very good,” while an 800 or above is “exceptional.” (The highest FICO® Score you can get is 850.) A score of 580 to 669, however, is only considered “fair,” while anything below 580 is regarded as “poor.”

If your credit score puts you in the “poor” category, you may have trouble qualifying for a loan, like a mortgage. You may also have difficulty getting approved for a new credit card.

But could poor credit prevent you from getting a job? Believe it or not, in some cases, it might.

It’s legal for employers to do a credit check

It makes sense that poor credit would potentially prevent you from getting a loan or credit card. A lower credit score sends the message that you’re a riskier borrower who may not make payments on time. It’s pretty easy to see why a lender or credit card issuer wouldn’t want to risk not being repaid.

But a job is a different story. With a job, you’re not asking to borrow money. You’re asking to earn money via the work you put in.

Unfortunately, though, it’s perfectly legal for employers in most states to run a credit check on potential employees. And your employer may decide to do this if you’re applying for a job that has you managing accounts or money on a company’s behalf. The logic on an employer’s part may be that if you can’t manage your own debts or finances, you can’t be trusted to manage the company’s. (This isn’t to say that this line of thinking is accurate — it’s merely an explanation as to why some companies do a credit check.)

Now, one thing you should know is that a prospective employer can’t check your actual credit score. But they can see a version of your credit report to get a sense of whether you’re current on your debts and whether you’re overextended financially.

Generally, poor credit comes as a result of having a record of late payments and large credit card balances relative to your total spending limit. So if an employer sees these issues on your credit report, they may decide not to hire you — even if you’re a fantastic employee who merely fell on some hard times in the context of your personal finances.

Check your credit report before applying for jobs

It’s not a given that a company you’re hoping to work for will check your credit in the process of reviewing your application. But it’s best to review your credit report before applying for jobs and address any items of concern you see. For example, if you see that you have a large outstanding credit card balance, you may be able to pay some of it off so you don’t come off as someone who relies heavily on credit to function.

Also, it’s not uncommon for credit reports to contain mistakes. If you review your credit report and spot an error that paints you in a less favorable light, like a delinquent loan payment you actually made on time, you’ll know to work with the credit bureau to correct it and avoid unfavorable consequences.

All told, it may seem unfair that employers can perform credit checks on prospective employees. But since that’s something they’re generally allowed to do, it’s important to review your credit report thoroughly and, if possible, get ahead of any issues that might compromise your ability to get a job.

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